General Motors has updated its financial forecasts for 2024 following a strong second quarter that exceeded Wall Street’s expectations. The automaker has raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, compared to the previous estimate of $12.5 billion to $14.5 billion. Additionally, it has increased its targets for operating cash flow and earnings per share. However, the expectation for net income attributable to shareholders has been slightly revised downwards, now estimated to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase from the previous year and surpassing the anticipated $45 billion, as per FactSet estimates. Earnings per share stood at $3.06, exceeding the $2.71 expected by analysts and showing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these strong results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, with an overall increase of over 37% this year. After the market closed on Monday, GM announced a third-quarter cash dividend, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs, revealing plans to launch eight new or redesigned vehicle models in North America. She also highlighted the company’s commitment to growing production of the electric Chevrolet Equinox while maintaining disciplined volume growth. Barra recently stated that GM would not reach its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this shortfall to a market slowdown, although EV sales did witness growth last quarter.
Barra announced that Cruise, GM’s autonomous driving division, will discontinue its Origin vehicle development following a previous operational setback. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing purposes in Texas and Arizona. GM incurred a $600 million charge resulting from the halt in Origin production in Detroit.
During an analyst call, Barra noted that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as its lack of a steering wheel. She mentioned that this shift would reduce costs per unit and allow GM to optimize its resources.
Moreover, GM is working to restructure its joint venture in China with SAIC Motor, as it continues to face losses. The company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles — a decrease of 50% compared to the previous year.